How Technology Is Changing Logistics in Indonesia
In the current Indonesian business environment, change is being implemented through technological advancements. This movement has taken over the traditional processes throughout Finance, Logistics, Agriculture and majority of the major industries.
Major Issue
Indonesian Logistics costs are some of the highest around South East Asia. Consuming 24% of the annual GDP costs, and being situated at one the top of South East Asia, this issue needs to be addressed. The Jokowi government has started to address the issue by creating new infrastructure and logistics mediators, but additional supporting products and services need to be created.
Supporting Industries
Software-as-a-Service has been a key driver to online marketplaces availability globally (Amazon, ebay, etsy etc.), and Indonesia has taken to using the platforms accordingly. This platform has not only shown positive use in the retail sector, but it can be applied on scale for any industry that has many separate vendors.
SaaS is beneficial for the customer and the vendor. Creating an average, transparent price for the customer, but also widening the market for vendors. It can create another entry path for customers to the vendors product and unlock alternative avenues.
Logistics Implementation
In focus is the Logistics Industry, a very traditional Indonesian industry. As many of the logistics vendors are spread throughout the country it can be difficult for customers to get accurate prices, or even fair prices. Not only difficult for gaining an accurate price, but the quotation could take from 2-7 days.
With the adaptation of technology throughout the Indonesian government, and new policies to help companies grow and prosper, technological start-ups have pounced on this opportunity. The SaaS can be seen as more efficient and effective, but also more transparent.
Case Studies
Deliveree
This Singaporean SaaS focuses on small sized packages and goods up to 150kg. The selected mode of transport is cars, vans and larger vans. For it’s pricing method it creates an algorithm for a kilometer rate. As it only manages intra-city deliveries, long haul logistics have not been addressed by Deliveree yet. The inclusion of Deliveree has added another player into the Intra-city delivery services. This is more of a logistics company than SaaS as it owns majority of its fleet.
Kargo
With access to over 4,000 trucks and 40,000+ discounts, Kargo has large scale shipments down to small sized packages, which need to be greater than 20kg. Not only domestic Indonesia, but international shipments are also accessible for global shipments. Once a customer knows what and when they are shipping, an order can be created instantly and shipped within the day if needed.
Caritruk
One of the other initial players that is traditionally Indonesia, and can ship to wider Java. This software bases is pricing also on an algorithm from pricing lists of hundreds of separate small scale logistics companies and drivers. Once a price is inquired about, a message is sent to Caritruk and the processes for order creation are completed after. This can take up to 2-3 days.
Lontar
A SaaS that is partnered with a Trucking Associations, so that the truck availability is subject to the trucking companies and the political bias of particular companies. This mainly focuses on large scale goods from port-to-door. A main focus is shipping containers or boxes, which are mainly found in the ports of Indonesia.
SaaS is Benefiting Indonesian Logistics
All of these SaaS can be found to increase efficiency within the Logistics Industry, and can reduce costs throughout the supply chain. Without technology the traditional logistics industry would be staying stagnant, and not decreasing costs whatsoever. With the overwhelming increase of logistics start-ups in Indonesia, growth and demand are expected to continue to increase.
Kargo.co.id are here as one of the fastest, most transparent logistics companies around, and being first of their kind can show long term focus and sustainability.